Registration System Reform Is Likely To Take A Shortcut.

Since the stock market crash, the stock market has been dominated by the main force.

Downward, there are policies and capital support; upward, there are "deleveraging", IPO registration system reform and other means of regulation.

Management obviously wants to maintain the "active bull market".

There are two big news in the market on Thursday.

The process of IPO registration is like a process of boiling water.

Management mainly does two movements: first, add cold water to the pot; second, add wood to the fire.

Timber is, of course, capital.

The first is payment.

Direct buying and buying, but this is limited; the two is to stimulate social capital inflow through lowering interest rates and reducing interest rates.

On Wednesday (December 2nd), Citigroup said in its 2016 outlook report that the global economic outlook for next year is becoming increasingly gloomy, and that the US is likely to fall into recession. China may also be the first major emerging market economy to reduce interest rates to zero.

The interest rate here is reduced to zero, which should be the real interest rate, minus the interest rate after CPI.

At present, the overnight interest rate of Shanghai Shibor is around 1.787%, and the IBO001 of interbank lending is around 1.795%, with an estimated CPI of 1.3%-1.4%.

The central bank will guide these rates to CPI through a series of monetary instruments.

As for the one-year deposit interest rate, it will definitely be lower than CPI, that is, a negative interest rate.

The growth rate of broad money M2 is likely to exceed 14% in the first quarter of next year.

Overflowing liquidity will stimulate

Go up.

The key is to see the speed of management "join the cold water", that is, the implementation rhythm of IPO registration reform, which is of course controlled.

However, as cold water continues to join, management will weaken the market and eventually lose control.

At this point, the original valuation system will collapse.

I estimate that this will happen at the latest in the second half of next year.

But the premise is that the current large shareholders of listed companies, "Dong Gao Gao" ban period is extended.

If it is sold out after January 8th, the crash will happen in advance.

So in 2016, although there were great benefits of capital and interest rates, the enormous uncertainty brought by the IPO registration reform was inevitable.

Since November 21st, when the financial website first reported "the results of the IPO registration reform in March", the SFC has not been rumor.

In December 2nd, there was a new version of the foregoing rumors. Some media said that the registration system was launched or earlier than the securities law.

Thursday's "twenty-first Century economic report" interviewed people who confirmed the possibility.

In accordance with the normal process, the introduction of registration system needs to amend the securities law.

The first draft of the revised draft was passed in April this year, and the securities law, which was originally scheduled for the second instance in August this year, was confirmed to be the fastest in December.

What is sad is that after the second instance, there are three trials.

So, if we go through normal procedures,

Registration system can only be launched in the second half of 2016.

But there are shortcuts to go.

The November 21st report said that it could be resolved through "legal authorization".

Specifically, the NPC is authorized by the National People's Congress or the State Council to authorize the SFC to do something through a decision or implementation.

There is no precedent for similar practices.

If so, there will be no problem with the introduction of registration reform in March.

According to previous reports, after the implementation of the IPO registration system reform, "let go of the rhythm of stock issuing and listing, and then release the issuing price", and finally, exchange the right of listing of enterprises to the market and enterprises themselves.

As for how long this process will take place, there is no specific explanation.

This is the fundamental factor that determines the direction of future stock market.

My judgement is that management will cross the river by feeling the stones, according to the stock market trend and economic trend.

If the pressure of steady growth is large, the pition period will be president; if the economic recovery is relatively fast, the pition period will be short.

And this pition period is the process of "approval system valuation" and "registration valuation".

I estimate that it will take about 2 years, and the median of P / E will at least decrease by 2/3.

That is, from 60 times earnings to 20 times less.

This market will become the purgatory of retail investors.